Research on competitiveness of garment firms in the key economic zone of central

MINISTRY OF EDUCATION AND TRAININGUNIVERSTY OF DA NANG------ VO THI QUYNH NGARESEARCH ON COMPETITIVENESS OF GARMENT FIRMS IN THE KEY ECONOMIC ZONE OF CENTRALMAJOR: INDUSTRIAL ECONOMY

MINISTRY OF EDUCATION AND TRAINING

UNIVERSTY OF DA NANG - -

VO THI QUYNH NGARESEARCH ON COMPETITIVENESS

OF GARMENT FIRMS IN THE KEY ECONOMIC ZONE

OF CENTRALMAJOR: INDUSTRIAL ECONOMY

CODE: 62.31.09.01SUMMARY OF PH.D THESIS ON ECONOMICS

Danang - 2014THESIS IS DONE AT

University of Economics, University of Da Nang

Thesis advisors: Assoc Prof Dr Nguyen Truong Son

Doan Gia Dung, Ph.D

Reviewer 1: Prof Dr Hoang Ngoc Viet

Reviewer 2: Assoc Prof Dr Tran Van Hoa

Reviewer 3: Do Thi Thanh Vinh, Ph.D

The thesis will be presented before the Thesis Commitee at the University of Da Nang

In date month 2014

Thesis can be found at:

LIST OF AUTHOR’S PUBLISHED

SCIENTIFIC WORKS

1 Vo Thi Quynh Nga (2012), The impact of the global financial crisis (2008-2009) on the global garment value chain, Research project managed by Danang University, accepted on 28/12/2012

2 Vo Thi Quynh Nga (2013), The impact of the global financial crisis (2008-2009) on the global garment value chain, Journal of Science and Technology University of Da Nang, No 65, April, p 79-86

3 Vo Thi Quynh Nga (2013), Competitiveness on financial aspects

of apparel firms in the Key Economic Zone of Central and the role

of the banking system, Journal of Science and Technology

University of Da Nang, No 68, July, 134-141

4 Doan Gia Dung – Vo Thi Quynh Nga (2013), About upgrading the value chains of garment firms in the Key Economic Region of

Central, Conference on Management Science, July 2013, p 84-92

5 Vo Thi Quynh Nga, Nguyen Truong Son (2013), Designing

applied model in measuring competitiveness of garment firms in

the Key Economic Region of Central, Journal of Economics and

Development, No 198, December 2013, p 60-70

24

+ A explanatory model is modified in accordance with the research context in the Key Economic Zone of Central

+ A new approach in the assessment of the competitiveness of

garment enterprises in the Key Economic Zone of Central: assessment not only based on representative data of the group but also on individual elements of the firms

+ Suggestion of garment manufacturing modes consistent with the target market and characteristics of enterprise resources

+ Solutions for development of support industry towards selective industry and provinces

4 The new research orientations

+ Expand the comparison subjects

+ Research of influence of garment manufacturing model on

competitiveness of the garment business groups with different sizes + Research of influence of garment manufacturing model on

competitiveness of the garment business groups on different markets

1

INTRODUCTORY CHAPTER

1 THE ESSENTIAL OF THEME

The Key Economic Region of Central consists of 5 provinces and

cities directly under the Central Government: Thua Thien Hue, Da

Nang, Quang Nam, Quang Ngai and Binh Dinh.This region is set to become the dynamic development region which create jobs and

improve people's living standards It is also set for creating a growth pole to create incentives for the development of the majority of Central coastal provinces and the Central Highlands In this development

orientation, the garment is one of sectors playing a strategic role in the industrialization and modernization of the city and provinces in the region The existence and development of garment enterprises depend very much on the chosen competitive strategy However, the garment is one of industries representing the global nature of the most prominent The garment sector is also one of the industries which are and will witness a fierce competition not only local but also on a global scale The existence and development of the garment firms in the Region heavily depend on their competitiveness which is increasingly attracting the attention of not only the managers but also by the authorities in strengthening the competitiveness of the country, of the local These lead to the need of measuring the competitiveness of garment

enterprises in the region, of finding out the influencing factors and then offering solutions for sustainable competition

2 RESEARCH OBJECTIVES

The implementation of the thesis is aimed to:

+ Designing a model for evaluation of the competitiveness of the

garment firms which is applicable to the scope of the study

+ Building a model for analysis of factors affecting the

competitiveness of the garment firms

2

+ Identifying the current and predictable status of the

competitiveness of garment enterprises in the region when compared with each other and with garment firms outside of the region

+ Verifying the influence of factors, both inside and outside of the firm, to the competitiveness of the garment firrms of the Key Economic Region of Central

+ Suggesting a system of appropriate solutions to maintain and

improve competitiveness for these garment frms

3 OBJECTS AND SCOPE OF THE STUDY

+ Research objects: competitiveness of garment enterprises

+ Scope of Research:

Regarding content: evaluate the competitiveness of garment firms in The Key Economic Zone of Central; analyze explanatory factors of garment firms competitiveness and propose a system of solutions to maintenance and improve the competitiveness of garment enterprises in The Key Economic Zone of Central

Regarding the research object: the sewing businesses whose

products are mainly clothing (industry code is 14100)

On the spatial scale: the headquarters of the garment firms are in The Key Economic Zone of Central In term of market, the spatial scale will cover both domestic and foreign markets

About time range: As usual, the 2012 data will not be available

before August 2013, so data range handled is only until 2011

4 RESEARCH METHODS

The thesis is done in mixed methods: combining qualitative and

quantitative

+ Qualitative Method: Theoretical background research and

interviews with experts

23

CONCLUSION

With all the contents have been presented above, the thesis

achievements can be summarized as follows:

1 The results of the thesis

Compared with the objectives of the thesis, research project has

achieved the following results:

+ A relatively complete theoretical background of competitiveness, including research perspective of competitiveness, the inner meaning of the competitiveness concept; models for research of competitiveness at the firm level of and theoretical background of apparel industry

+ A distinctive theoretical model to assess competitiveness and

analyze the factors affecting the competitiveness of garment enterprises + A model of competitiveness research (evaluation and factor

analysis) have applicability in the research context of the Key

Economic Zone of Central with a big number of studied and refenced objects

+ A relatively systematic evaluation for competitiveness of garment enterprises in the region

+ A detailed analysis of the relative influence of the factors groups

on the competitiveness of the garment enterprises in the region; the original factor are tested

+ A system of solutions can be applied at the enterprise level and at the macro level with many new features such as choice of apparel

production modes, development of selectively support industry

2 New research results

+ Theoretical models for evaluation and for explanation of garment

enterprises competitiveness in particular economic zones

22

Increasing ability to provide information on new materials, to

participate in design activities, to consult fashion trends, to undertake logistic activities of input and output, quality control

3.4.1.7 Some other solutions:

* Achieving certification agaisnt international standards to improve the confidence of buyers

* Orientation towards environmental protection in production

3.4.2 The solutions at the macro level

3.4.2.1 Development of selective support industries

+ Industrial orientation: towards the industries not requiring

complicated technology, less environmental pollution (sewing, buttons, lace )

+ Local orientation: not investing in the 5-scattered localities in the region; not investing in the dyeing industry in Danang and Quang Nam because of the risk of sea pollution; this industry can be invested in Thua Thien Hue

3.4.2.2 Strengthen state management and businesses support

functions

Strengthening the role of the authorities and of fuctional

management bodies in implementing government policy on small and medium garment enterprises, human resource training in sewing, trade promotion for garment industry , providing market information,

certification of origin, anti counterfeit

3.4.2.3 Enhancing intra-regional cooperation in the development

of the garment industry

The viewpoint is that provinces and city in the regiong exploit

together comparative advantage of localities in the region Orientation

of intra-local cooperation: at the corporate level (sharing orders,

marketing collaboration, collaborative training ) and at the local level (discussion in the planning sector, collaboration in organinsing

industrial fairs, in promoting trade )

3

+ Quantitative Methods: descriptive statistics, index, ANOVA on Excel

5 EXPECTED RESULTS

The thesis is expected to achieve the following results:

+ A relatively completed theoretical background of competitiveness + A evaluation model and a explanatory model of garment firms

competitiveness of enterprises which are applicable in a specific research context: the Key Economic Region of Central

+ Assessment results of competitiveness of garment firms in the Key Economic Region of Central

+ Analysis findings of influences of factors on the competitiveness of the garment firms of the Key Economic Region of Central

+ A number of proposals at the micro level and macro level in order to improve the competitiveness of garment firms of the Key Economic Region Central

6 OVERVIEW OF RESEARCH

+ The levels of competitiveness rechearchs

+ The points on competitiveness research

+ The main research directions of competitiveness

+ The main research directions of competitiveness in the garment

industry

+ Theoretical background has been applied in the studies of the

garment industry competitiveness

+ The research methods and results

4

CHAPTER 1

THEORETICAL AND PRACTICAL BACKGROUND OF

ESTABLISHING MODELS FOR STUDYING

COMPETITIVENESS OF GARMENT FIRMS

1.1 FIRM COMPETITIVENESS

1.1.1 The concepts of firm competitiveness

In this section, many competitiveness concepts are introduced These are concepts which are often cited, referenced in a lot of

competitiveness researches works, including the concept of the report

on the oversea trade activities in some branch of Loyds (1985), of D'Cruz and Rugman (1992), of Markusen (1992), of the European Community Europe (1993), of the White Paper on competitiveness of the UK (1994 ), of Chickan (2001), of the Asian Development Outlook (2003), of Vu Trong Lam (2006)

1.1.2 Characteristics of competitiveness

In addition to the multi-level attribute of competitiveness concept, this concept has also additional connotation such as multi-defined, multi-measured, dependent, relative and dynamic

1.1.3 The concept of firm competitiveness of the thesis

With a Performance viewpoint, inheriting the spirit of the precede research on competitiveness, in this thesis, competitiveness is the ability

of firms in dealing with competition to maintain and enhance the value

of the firm

1.2 MODELS FOR STUDYING FIRM COMPETITIVENESS

1.2.1 An overview of the competitiveness research models

+ In term of level of competitiveness: there are models for studying

national competitiveness, industrial competitiveness and corporational

competitiveness

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3.4 SOLUTIONS OF ENHANCING COMPETITIVENESS OF GARMENT FIRMS IN THE KEY ECONOMIC REGION OF CENTRAL

3.4.1 Solutions at firm level

3.4.1.1 Diversifying markets and products

Based on the analysis of the market prospects, this solution indicates

some markets in which, garment firms in the region can exploit, as well

as some lines of specialty products can be developed corresponding to

each target market

3.4.1.2 Selecting the suitable mode of garment manufacturing

This solution suggests a number of directions in the selection

garment manufacturing modes corresponding behavioral characteristics

of the buyers in the target market as well as the resources of the

company

3.4.1.3 Keeping in consolidating the cost advantage

This solution includes proposals to reduce costs, such as

identification and mitigation of activities which do not create value,

innovation of production methods and organization of garment

production, renovation of garment production equipment,

computerization of the operations, and improvement of labor

productivity

3.4.1.4 Increasing the perceived value of the products

This solution aims to increase the perceived value of the products of garment enterprises in the region through intensive investment into designing to provide truly unique and innovative designs; through selection of valuable materials; through enhancing brand promotion activities in specific activities such as fashion shows, participation in industrial fairs

3.4.1.5 Reducing lead time

Garment firms can shorten lead time through proactive early offers, sharing orders, materials sources control right after offers, planing and serious control of plan implementation

3.4.1.6 Developing the ability to provide full service

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1.2.2 Research models of firm competitiveness

The models are sorted into three groups:

+ Group of competitiveness evaluation models includes the Three Dimensions of Competitiveness, the Total Value Competitiveness, the Economic Value Added, the Value Curve, the Balanced Score Card, the Integrated Value Management, the Total Shareholder Returns, the Gelei model

+ Group of explanatory models includes the Diamond framework, the Competitiveness Triangle

+ Group of integrated models includes EFQM model and APP

model

1.3 FORMATION OF MODELS FOR STUDYING